Florida Board Certified Construction Attorney

Category Archives: CONDOMINIUMS

Ideally, owners, contractors and developers should possess knowledge of Statutes of Limitations, statutes of repose applicable to construction defects. They should understand what latent and patent defects are well prior to the bid phase or commencement of contract negotiations. In any event, knowledge of latent and patent defects should be in the party’s thoughts, prior to participating in inspections and settlement negotiations with condominium associations, unit owners, and others. Equally as important, given the complexity of condominium construction litigation, contractors should appreciate the differences between traditional, owner controlled, and contractor controlled insurance programs. In addition, contractors should consider the benefits of maintaining a post construction management plan to receive, evaluate, and resolve defect and warranty claims.

Express Warranties are typically stated in writing pursuant to contractual documents. Such warranties are typically provided by general contractors and their subcontractors, suppliers, and vendors for one year from the date of substantial or final completion of the project. Longer express warranties may be provided for specific building components pursuant to project specifications or other contractual requirements. Of course in many states, including Florida, there are statutory warranties that flow to the benefit of condominium associations and owners.

In contrast, Statutory Condominium Warranties for condo projects may require contractors to provide guarantees for durations which are often not determinable until after the project is completed. Moreover, in certain jurisdictions the determining factors for the commencement of warranty periods are often beyond the control of the contractors. Some states link commencement of the warranty to the percentage of individual units sold by the developer and/or the date of turnover of control of the condominium by the Developer to the homeowner controlled condominium association. Pursuant to Florida law for example, Statutory Warranties are provided by the general contractor, subcontractors, and suppliers in favor of the developer, the condominium association and directly to each condominium unit purchaser for specified periods of time. Depending on the building component in question the warranty commences after “completion of all construction” or “completion of a building or improvement” (again, depending on the building component in question). To further complicate matters, the time within which legal action can be taken to enforce these warranties is frequently tolled if there is a delay in turnover of control of the condominium by the Developer. Accordingly, contractors should understand the relationship between statutory and contract warranties, and the transfer of control of the condominium to the homeowner controlled condominium association.

Contractors and owners should also understand the applicable laws governing the period of time for filing a lawsuit after an event (such as a breach of warranty), frequently referred to as the Statute of Limitations. Although laws vary by State as to what starts the warranty, it typically begins after completion of all construction and/or issuance of a final Certificate of Occupancy. Laws regarding hidden defects, often referred to as Latent Defects, may extend the limitations period for a claimant to file a lawsuit by delaying the commencement of the limitations period until the defect is discovered or should have been discovered with the exercise of due diligence. The determination of what is ‘discoverable’ is subjective and accordingly, the conservative approach is to consider condominium associations and homeowners unsophisticated with regard to construction and design matters unless demonstrated otherwise.

Contractors should also consider the applicable Statute of Repose, a term used to describe the absolute deadline for a potential claimant to file a lawsuit. The governing repose period varies widely depending on the jurisdiction. In Florida, the legislature changed the absolute length of the Statute of Limitations from 15 years to 10 years.

Post-Construction Management

The good news is that litigation is not inevitable. In recent years proactive owners, contractors and developers have successfully resolved post-construction defect and warranty claims by condominium unit owners and condominium associations without litigation. Additionally, implementation of a post-construction management plan incorporating proactive claim avoidance measures and claim resolution strategies may further mitigate the costs and risks associated with condominium construction. The following suggestions are provided for consideration in this regard.

Temporary Certificate of Occupancy Phase (“TCO”)

1. Establish a post-construction management team to receive, investigate, and respond to warranty, construction defect, and design defect claims.

4. Address potential problems when discovered, preferably before the potentially responsible parties receive a retainage reduction and/or final payment. If not timely addressed, the issue will likely be discovered later by the condominium association or owner’s engineers during the turnover inspection. Waiting until then, will ultimately be more costly in terms of repair costs, legal costs, and loss of reputation.

5. Promote a philosophy of client and customer care. Establish relationships with property management personnel and unit owners. Consider the permanence of first-impressions and the possibility the jobsite is open to visitors, i.e. future condominium board members and residents, consultants, engineers, and attorneys.

6. Copy and store key documents for post-construction management. Include copies of Certificates of Insurance from each party to the project, store the prime contract, change orders, subcontracts, as-built drawings, as-built specifications, warranties, maintenance manuals, RFI’s, submittal and RFI logs, and all key submittals. Maintenance of documents by the Post-Construction Manager should facilitate efficient claim assessment and timely responses to prospective claimants.

Final Certificate of Occupancy Phase (“CO”)

1. Carefully document and report modifications to building components and systems by others. Include the information in the post construction management documents for consideration during any future claim assessment. Monitor the activities of the developer, condominium association, property management, and unit owner own separate contractors and representatives. Examples of significant Owner modifications include contractors moving walls, modification of plumbing, electrical, and HVAC components. Do note when owners have removed original components to accommodate owner aesthetics.

I had a case recently where the owner removed waterproofing components from the exterior of sliding glass door frames. This did allow the owner’s tile subcontractors to create AN aesthetically pleasing finish against the door frame. However, the Unit Owners unwittingly may make modifications of building envelope components to the detriment of the water barrier. Other problems caused by owner improvements to the detriment of the water barrier. Other problems caused by Owner improvements occur frequently during cable, satellite, audio visual, telephone and other installations. The incompatibility of the low voltage wiring with the plastic pipe or other components in the structure can prove disasterous.

2. Carefully document and report unusual maintenance practices by the condominium association, property management, homeowners, and housekeepers. Examples include the use of caustic cleaning solutions, window cleaning crews damaging gaskets and glass, and excessive use of high pressure water in areas not designed for such use.

3. Continue efforts to establish and cultivate relationships with condominium association board members, property management company personnel, unit owners, and the consulting engineers. Building engineers and property management personnel are a valuable source of information regarding post construction activities, complaints, and maintenance issues. Develop early warning systems and protocols for addressing potential issues before the condominium association or residents have the opportunity or need to ring alarm bells and make an otherwise minor issue more difficult and costly to resolve.

1. Notification: Activate e-mail and/or phone notification systems for reporting of warranty and defect claims. A 24-hour answering service may be established to receive and forward calls to the post-construction manager from unit owners, developers, condo associations, and property managers.

2. Evaluation: The post-construction manager may take the following action as appropriate/necessary:

Interface with counsel and business unit operations management to determine if claim/notice is relevant to pending matters, claims, or negotiations;

Evaluate the need and strategic advantages to delegate to counsel, etc.;

Determine if consultants are required. If so, consider notice requirements and procure necessary approval from entities such as insurance carrier; and if multi-component claim, attempt to ascertain which issues are most important to claimant and determine plan and structure negotiations accordingly.

Evaluate preliminary findings of any retained consultant and determine if a written report is appropriate. If so, work closely with consultant to obtain report – utilize attorney work product privilege to the extent possible;

Coordinate review of the report with counsel and operations manager as appropriate;

A well thought out plan of action for dealing with the inevitable claims and issues that arise after the “completion” of a condominium project represent a sound investment in risk management and mitigation of the potential for expensive litigation.

All of the suggestions provided herein are based on years of experience and successful application. They are intended to complement existing procedures not replace them. If you have questions, comments, or would like to discuss the subject matter in additional detail, please contact Christopher J. Weiss Esq. at (407) 928-6737 or email chris@cweisslaw.com.

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